Sep 18 2018

Rupee Hits Record Low As Oil Surges

Financial Market Overview

18th September, 2018

Evening Coffee:-

MARKETS AT CLOSE:-

Rupee:-

  • The Indian rupee plunged to a record low today, settling shy of the key 72.9750-to-dollar level, as rising crude oil prices and escalating trade conflicts between the U.S. and China hurt demand for emerging market assets.
  • The rupee, Asia’s worst-performing currency in 2018, fell to an all-time low of 72.99 to dollar before settling at 72.9750, against 72.51 at the previous close. The slump came despite the government’s recent announcement of a slew of measures to attract more foreign fund inflows into the country.

 

Indian Equities:-

  • Market continued to correct on Tuesday with the Sensex falling nearly 300 points after a 500-point fall in previous session.
  • The market has been seeing headwinds from high crude oil prices, weaker rupee, bond yield above 8 percent and trade war.
  • The BSE Sensex ended 294.84 points lower at 37,290.67 and the NSE Nifty lost 98.90 points at 11,278.90 despite positive global cues.

 

Global Markets:-

  • European markets are trading higher today. The France’s CAC40 is trading higher by 0.23% followed by the Germany’s DAX at 0.17%, the Spain’s IBEX35 at 0.14%, the Eurozone’s Euro STOXX50  at 0.10%  and the London’s FTSE100 at 0.01%  and the SMI is off by 0.30%.
  • An emerging market rout and concerns over worsening of India’s current account and fiscal deficit have led to a 14.3% fall in the rupee this year, prompting New Delhi to mull restrictions of imports of non-essential goods. Concerns over higher U.S. interest rates and further monetary tightening in India have also led to record outflows from the equity and debt markets.
  • China has said it will retaliate to the latest U.S. move to impose a 10% import tariff on $200 billion of goods that will come into effect from next week. This has raised the risk that U.S. President Donald Trump could soon impose duties on almost all of the Chinese goods that the U.S. buys.
  • Brent crude oil rose to as high as $79.37 per barrel today. India imports 80% of its crude oil requirements.
  • Foreign investors have sold $6.91 billion of Indian stocks and bonds so far in 2018 against total purchase of $34 billion in 2017.